Essentials of Business Analytics 1st Edition by Jeffrey Camm,James Cochran,Michael Fry,Jeffrey Ohlmann ,David Anderson

Exercise 13

For this problem, use the Land Shark simulation model from Problem 19 that fits a distribution to data in order to simulate competitor bid amounts.
a. Use ASP to apply simulation optimization to determine Land Shark's bid amount (rounded to the nearest $1,000) that maximizes its expected return. To reduce the time to solve this model, you may want to reduce the number of trials per simulation to 1000. What is the probability that Land Shark wins the auction
b. If Land Shark bids $5,000 more than the amount in part a, what is the likelihood that it wins the auction How much expected return does Land Shark sacrifice by increasing its bid in this manner